Boss of Speedy Hire quits after £5m hole found

Oliver Smith is a senior reporter at The Memo, an online publication curious about the future of technology. He was formerly a reporter at City A.M.

Follow Oliver

Oliver Smith

BRITISH construction equipment provider Speedy Hire has said its chief executive will step down and that the finance director of its international unit has been suspended after it uncovered accounting irregularities.

The company said yesterday that, based on the information it had available, control processes within its international division had been repeatedly and deliberately circumvented.

“Information has very recently emerged indicating the mis-statement of a number of accounting balances within the International Division over recent accounting periods,” Speedy Hire said in a statement yesterday.

Group chief executive Steve Corcoran will step down from the board and leave the company at a date to be finalised, the company said.

Corcoran became chief executive in 2005 and has worked at the group for 26 years. He took home a basic salary of £355,000 last year.

Speedy Hire said the issues were limited to smaller contracts in its international division, which operates mainly in the Middle East and accounts for five per cent of group revenue.

It said the total financial impact of the mis-statements would amount to about £4.5m to £5m, including a hit to its pre-tax profit for the year ending March 2014 of about £3m.

Speedy Hire had been expected to hit consensus full year forecasts of £20.9m before the irregularities were discovered.

“The information currently available suggests that certain control processes within the international division have been repeatedly and deliberately circumvented,” said Speedy Hire.

“The group remains in compliance with the financial covenants under the group’s banking facilities but these circumstances have resulted in a breach of certain other terms.”

In the statement, released after the market closed, Speedy Hire said that its UK business – which makes 95 per cent of its annual revenue – was unaffected and that it had appointed Addleshaw Goddard to conduct an independent legal investigation.